Representatives of the Ulster Political Research Group (UPRG) and the Progressive Unionist Party (PUP) met with local Unionist councillors, the PSNI and community representatives on Monday evening to discuss the possible adoption of a protocol that is already in place in Coleraine and Londonderry.
UPRG Regional Secretary and Political Spokesman, David Malcolm, said the meeting was positive but stressed it was up to the grass-roots loyalist community in Limavady to decide whether they wanted to follow the steps already taken in neighbouring districts.
Amongst the stipulations of the protocol are that no paramilitary flags will be flown in loyalist areas and that all flags will be removed in conjunction with the Roads Service on September 1, 2008 at the end of the traditional marching season.
UPRG or PUP members will be present at all times when Roads Service personnel are engaged in flag removal and all emblems will be handed back to the community for safekeeping and re-use, a statement from the UPRG/PUP reads.
Whilst a period of further consultation on the protocol will now take place ahead of a second meeting in Limavady later this month to decide on whether it would be adopted here or not, Mr Malcolm said he hoped that it would.
The UPRG/PUP statement outlined the rationale behind the initiative by saying: "In recent years, Loyalism in general has been accused by Mainstream Unionist Politicians and others of leaving flags up to rot and decay.
"Our Community has taken this step to force those who are actually responsible for the problem to be held accountable for the flags THEY erect and so they cannot blame our community in the future for their own failings.
"This protocol is also in place in other towns throughout the North West such as Coleraine and we would actively encourage all Protestant Unionist Loyalist Communities who have not already adopted the protocol to sign up to it.
"Our groups are in discussions with the PSNI and Community Representatives in Limavady to ascertain a willingness to adopt the protocol there too for this summer.
"We would also encourage Statutory Agencies and others to enter discussions sooner rather than later so a more Permanent Protocol can be put in place for subsequent years."
Limavady Sinn Féin Councillor Paddy Butcher welcomed the move.
"Sinn Féin certainly welcome this initiative, which has worked well in the neighbouring council areas of Coleraine and Derry," said Mr Butcher.
"We respect the Unionist right to celebrate their tradition as long as all the paraphernalia is removed after the event.
"However, the flying of flags for twelve months of the year on the Edenmore Road is an eyesore.
"Nationalists and republicans fly the tricolour at Easter and other republican commemorations but they are always removed immediately after the event," he said.
A PSNI spokeswoman said: "The Police Service of Northern Ireland is firmly committed through its work with its partner agencies and local communities to address the issues surrounding the flying of flags in public areas.
"The display of flags to mark out geographical areas of control or to promote sectarianism or intimidation is wholly unacceptable in a peaceful and tolerant society, and the Police Service is clear in its responsibility to work with communities to find acceptable solutions and enforce the law."